Startup Investment and Research & Development Programs

Provides tax credits against corporation business or gross income taxes based on qualified investment in New Jersey’s emerging technology.

20% of the qualified investment made in an NJ emerging technology business, with a potential increase to 25% if the business is certified M/WBE or located in an Opportunity Zone or New Market Tax Credit Census Track.

The New Jersey Angel Investor Tax Credit Program establishes tax credits against corporation business or gross income taxes based on qualified investment in New Jersey’s emerging technology businesses to stimulate investment. The Economic Recovery Act signed by Governor Murphy in January 2021 has increased the annual program cap to $35 million from $25 million in tax credits.

The amount available: 20% of the qualified investment made in an NJ emerging technology business, with a potential increase to 25% if the business is certified M/WBE or located in an Opportunity Zone or New Market Tax Credit Census Track.

Eligibility:
Employs fewer than 225 full-time employees, at least 75% of whom work in New Jersey

Does business, employs or owns capital or property, or maintains an office in New Jersey

Conducts at least one of the following activities in New Jersey:

Incurs qualified research expenses in the State

Conducts pilot scale manufacturing in the State

Commercializes one or more of the following eligible technologies in the State: Advanced Computing, Advanced Materials, Biotechnology, Electronic Devices, Information Technology, Life Sciences, Medical Devices, Mobile Communications, Renewable Energy Technology, and Carbon Footprint Reduction Technology.

Has as its primary business an eligible technology (as listed above.)

Qualified investments include non-refundable transfers of cash made directly to the New Jersey emerging technology business in connection with at least one of the items listed below. To be considered non-refundable, these items must be held or not expire for at least 2 calendar years from the date of the transfer of cash, with an exception being made for initial public offerings (IPOs), mergers and acquisitions, damage awards for the business’s default of an agreement, or other return of initial cash outlay beyond the investor’s control.
stock, interests in partnerships or joint ventures, licenses (exclusive or non-exclusive), rights to use technology, marketing rights, warrants, options, or any similar items, including but not limited to options or rights to acquire any of the listed
a purchase, production, or research agreement.
Credits may be treated as an overpayment and refunded (but no interest on the overpayment will be paid.), For corporate taxpayers, the tax credits may be carried over up to 15 tax years following the tax year for which the credit was allowed. Individuals cannot carry forward the tax credits.
Credits may not be carried forward in a tax year in which the taxpayer was a target for corporate acquisition or in which the taxpayer was party to a merger or consolidation unless the taxpayer can demonstrate to the New Jersey Division of Taxation the identity of the acquiring corporation.
Credits may be claimed on the taxpayer’s New Jersey tax return in the tax year applicable to the effective date of approval.
Applications should be submitted by the angel investor entity, if applicable, or the individual angel investor. The New Jersey emerging technology business will also need to fill out a section of the application and provide certain information with the submission, though the angel investor is responsible for all application information.

Qualifying New Jersey-based entrepreneurs and innovative startup companies.

Proposed Qualified Businesses may access up to $5,000,000 of program investment capital for equity investments, or $6,250,000 for State- certified women or minority businesses, New Jersey university spin-offs, or businesses that utilize intellectual property developed at a New Jersey university that is core to its business model.

The New Jersey Innovation Evergreen Fund Program forms a platform to facilitate private sector engagement that will raise and invest capital in qualified New Jersey-based companies and promote strategic collaboration in the state’s innovation economy.

All program investments will be matched by an investment from a Qualified Venture Firm that will manage the Authority’s capital through a special-purpose vehicle. Qualified Business applications will be reviewed by staff on a rolling basis and will be presented to the Board of the Authority for approval.

Companies in New Jersey with a net operating loss carryover and/or R&D tax credits in New Jersey and have no positive net operating income for the last two years.

Tech and life sciences companies can sell their New Jersey net operating losses and/or research and development (R&D) tax credits for cash. The program is subject to an annual cap of $75 million. Companies participating in the program are subject to a lifetime cap of $20 million.

To participate in the NOL Program, a company must:

Have protected and proprietary intellectual property (PPIP that is exclusive to the applicant company).

Employ up to 225 full-time employees that live and work in the United States and who receive health care coverage. At least a portion of these employees must live and work in New Jersey.

Have net operating loss carryover and/or R&D tax credits in New Jersey.

Have NO positive net operating income for the last two years.

File Corporate Business Tax returns in New Jersey.

The NJEDA works with the NJ Division of Taxation to determine awards given through the NOL Program. The program is subject to an annual cap of $75 million. Companies participating in the program are subject to a lifetime cap of $20 million.